Bill would make it harder for telecoms to skirt competition

A House bill would delete the "Rosemary's Baby" of FCC regulations: the …

Rep. Edward J. Markey (D-MA) compares the Telecommunications Act of 1996's controversial "deemed granted" rule to a famous horror movie. "There's kind of a Rosemary's Baby quality to this one provision," Markey told the House Commerce and Energy Committee's Subcommittee on Telecommunications hearing yesterday. The audience laughed as he wondered out loud who in the Senate gave birth to the process that led to the regulation: "Everybody agrees that it's an incredibly important story line, but nobody wants to take credit for the law of unintended consequences."

What is this hellish codicil that Markey is referring to? When Congress passed the Telecom Act, it required incumbent telcos to sell smaller voice/data competitors access to their networks at wholesale rates to increase the amount of competition in local markets. But the law also set up a "forbearance" system by which the big carriers—Qwest, Verizon, and AT&T—can obtain access waivers from the Federal Communications Commission by proving that substantial competition already exists in a given region.

The problem with this process, say critics, is that it includes a "shot clock" clause. If, after a year plus ninety days, the FCC's five commissioners can't agree on a particular forbearance petition, the "deemed granted" rule, well, just deems the waiver application granted. This has been a very nasty point of contention between the incumbent bells and competing carriers ever since March of 2006, when the Commission deadlocked on a Verizon forbearance bid, and the wireless giant got its deregulatory way.

So, at yesterday's hearing, subcommittee chair Markey publicized his cure for this problem: Rep. John Dingell's (D-MI) H.R. 3914, a bill titled the "Protecting Consumers through Proper Forbearance Procedures Act." The bill takes the "deemed granted" wording out of the Telecom code and just says that the FCC has to make a decision in a year, with a ninety day extension if necessary.

"If there is a clear majority to support forbearance of specific obligations," Markey told the hearing, "then let's have the FCC act in a timely fashion, with written justification, to approve such forbearance. But an agency's inability to act should not result in the removal of statutory duties that may have taken Congress years, and a clear Congressional majority, to enact."

And it's not a theoretical point either, Markey noted. If FCC Chair Kevin Martin quits early next year, the Commission's eminently deadlockable combination of two Democrats and two Republicans will have to resolve forbearance petitions on their own for a while. There's a big forbearance deadline coming up on Saturday, by the way: Qwest's bid for regulatory relief in Denver, Minneapolis, Phoenix, and Seattle.

H.R. 3914 had plenty of supporters at yesterday's hearing, prominent among them Matthew Salmon, president of Comptel, the competitive exchange carriers' trade association. "Imagine a subcommittee in these hallowed halls of Congress," Salmon testified to Markey and his colleagues, "where a tie vote is enough to pass the bill. Where three bills are scheduled and only two are heard, and because of that all three pass. We'd all say that that's ludicrous. But essentially that's the type of process that we have to deal with at the FCC."

Republicans on the subcommittee pointed out that, despite this dilemma, most forbearance petitions do get voted up or down. And lots of groups have to deal with another kind of FCC problem, the agency's famous predilection for not deciding anything at all for great lengths of time. Cliff Stearns (R-FL), Charles Pickering (R-MS), and Fred Upton (R-MI) all spent their panel question time maneuvering for some kind of compromise that fell short of H.R. 3914. "I do think that we want regulatory certainty," Pickering said. "And to the degree that we can force the FCC to act within a time certain period I think that that is in everyone's best interest."

But most of the panelists at the hearing—representatives from various competitive carriers such as XO Communications and TW Telcom—would probably rather have indefinite periods of uncertainty than a system that rewards uncertainty with higher wholesale access rates. Even a rep from Comcast's voice services division showed up to support the Dingell bill. "There should be no forbearance by default," Comcast vice president Catherine Avgiris told the subcommittee.

Matthew Lasar / Matt writes for Ars Technica about media/technology history, intellectual property, the FCC, or the Internet in general. He teaches United States history and politics at the University of California at Santa Cruz.